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Cairo - Egypt's military-installed government resigned en masse on Monday in a surprise move ahead of a presidential poll likely to bring defence minister and army chief Abdel Fattah al-Sisi to power.

A limited reshuffle to allow Sisi to step down as defence minister and enter elections had been expected, but the across-the-board resignations led by the increasingly unpopular prime minister Hazem al-Beblawi surprised even some in the cabinet.

Appointed in July after the military ousted Islamist president Mohammed Morsi, Beblawi's government came under pressure to step aside amid a worsening economy and a spate of militant attacks and labour strikes.

The resignations might lead to a new cabinet without the baggage of Beblawi's government ahead of Sisi's expected run in the presidential election this spring.

Sisi, who emerged as the country's most popular political figure after ending Morsi's divisive one-year rule, has not yet announced his candidacy, but aides say he has already decided to run and will make the announcement soon.

The field marshal, who is the defence minister and first deputy prime minister in the outgoing cabinet, has to resign from the government and the army before he can officially announce his candidacy.

Beblawi defended the government's performance in an address announcing the resignations.

"The government assumed its responsibilities and duties... the government did not spare any efforts to get Egypt out of a bad phase," Beblawi said.

“The nation is above everybody”

"This is not the time for personal interests. The nation is above everybody."

The cabinet said in a statement it resigned "in light of the current situation that the country is going through".

The mass resignations could have been triggered by the pressure on Beblawi himself to step down.

"If Field Marshal Sisi decides to run, he would like to run with a government that has a good reputation and can help him by resolving some of the urgent problems faced by the people."

Later on Monday, interim president Adly Mansour praised Beblawi for accepting the prime minister's responsibility at a "critical and difficult time following the glorious June 30th revolution".

"He assumed this role at a time when the burden of the nation's problems, which had accumulated over decades, was immense, both in terms of economic deterioration and marginalisation of a number of different segments of society," Mansour said in a statement as he accepted the government's resignation.

'New blood'

Government spokesperson Hany Saleh told AFP that Monday's decision was taken because there was a "feeling that new blood is needed".

The government's resignation came as Hamdeen Sabbahi, a prominent candidate for the election, told AFP he fears a return to autocracy in Egypt three years after its Arab Spring uprising.

While his chances of winning against Sisi are seen as slim, Sabbahi said he was urged to run by the young people who led the 2011 uprising that toppled longtime president Hosni Mubarak.

They "feel that their revolution was being stolen... as their comrades were being jailed and some killed before their eyes," he said in an interview.

In the more than seven months since Morsi's overthrow, Egypt has been battered by protests, street clashes and militant attacks that have damaged its vital tourism industry and scared off investors.

Beblawi's government had announced two stimulus packages funded by Arab Gulf states but still faced accusations of incompetence, even by many Sisi supporters.

The expansion of the crackdown on Morsi's supporters to more secular activists had also alienated some who supported the overthrow last year of Egypt's first democratically elected leader.

Some leading secular activists who spearheaded the overthrow of Mubarak and then called for Morsi's ouster have since been jailed for unauthorised demonstrations.

But many Egyptians, weary after three years of unrest, view Sisi as a strong hand that can restore stability to the country.

The government's resignation appeared to have taken the US State Department by surprise, with spokesperson Jennifer Psaki saying it was "unexpected".

"Obviously we're watching it closely," she said. "We are reaching out to our Egyptian counterparts."

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